Start With $10,000 and Retire a Millionaire

All it takes is money and time; it always does. But what this really means is you have to save money over time, and that's where so many of us struggle.

Reaching age 65 with $1 million saved requires strong discipline and sustained effort. You need to recognize the importance of starting early and putting money away regularly. But even if you don't have as much time, you still have options other than a last-ditch Hail Mary pass.

Call it a 7% solution. Assume a 7% inflation-adjusted return from a portfolio of U.S. and international stocks, bonds and cash -- not overly aggressive, but an expected return that requires taking some risk -- and living well within your means.

"In order to save, you have to understand your spending," said Eric Kies, a financial adviser with The Planning Center, an investment manager in Moline, Ill. "Build some awareness of where you are now, where do you want to be, and what are you willing to do to get there."

Of course there will be bumps along the road -- potholes, even, that challenge your resolve. The financial markets love to shake and stir individual investors; don't give up, because it may be hard to get back in

"It's less about where the money is invested and more about your ability to be disciplined," Dungan said. "Ask yourself, What is realistic? What can I achieve? The best savers don't have magical thinking about money. They're honest with themselves."

25 Years Old: Starting Out

Forty years is a long time. So long, in fact, that it's easy to put off saving for the future. There are bills to deal with, college debt to pay, stuff to buy, vacations to take, a career to build.

Savings -- sure, but who has money for that? Indeed, one of every three Americans between the ages of 18 and 33 have no personal savings, according to a recent Harris Poll survey. What's more, 53% of this age group has zero in the way of retirement savings.

They're missing out, big time. If a 25-year old with $10,000 invested $320 a month at a 7% annual compound rate of return until they turned 65, they would wind up with $1 million.

"There's a reason why Albert Einstein called compounding the most powerful force in the universe," said Jonathan Guyton, a principal at investment manager Cornerstone Wealth Advisors in Minneapolis.

Whether or not Einstein really said this, the math speaks for itself. At 7%, your money doubles every 10 years.

If saving a few hundred bucks a month seems daunting, rest assured it only gets worse. One way to make the job easier is to rely on your job -- specifically investing in your company's 401(k) plan and enjoy whatever contribution match your employer offers. Think of it as free money.

Don't have a 401(k)? Open a Roth IRA if you qualify, and automatically deposit money into it from your bank account to get tax-free growth.

35 Years Old: Early Innings

Ten years later, the price of waiting has been high. Not as costly as it will be, but tough enough. Instead of $320 a month, you're looking at saving $775 a month to turn that $10,000 into seven figures at a 7% annualized return.

Don't beat yourself. Just save. Funnel money into your 401(k) so you're not dipping into your own pocket for the full amount. Take the Roth IRA route if you can. By now you may have a young family -- so do it for the kids. Show them you not only can make money, but also know how to handle it.

"Children can be extremely good motivators to good financial habits," said Eleanor Blayney, consumer advocate for the CFP Board and a wealth adviser in McLean, Va. who specializes in financial planning for women.

Teach the kids sound money habits, and teach yourself at the same time. Said Blayney: "It induces you to be financially smart."

45 Years Old: Halfway Home

At 45, you're likely established in your career, with a decent salary. You may own a home, and the kids are thinking about college.

It's good you're making money, because you'll need to add $1,850 every month to that $10,000 base in order to reach $1 million in 20 years.

"There's a greater sense of urgency; your window for taking advantage of time is starting to close," Dungan said.

Yet one in four Americans between the ages of 46 and 64 have no retirement savings, the Harris Poll found. Another 22% have retirement savings mostly in bonds and savings accounts.

With so little saved at this point, you would do well to reevaluate your expectations for retirement. Are you saving and investing accordingly? You may have to weigh the purchases you make today versus a stable retirement.

"Now's your chance," Blayney said. "Don't blow it."

55 Years Old: Winding Down

At 55, the amount needed to reach $1 million with a $10,000 bankroll is both comical and sad: $5,700 a month for 10 years.

Maybe you've been living paycheck to paycheck, and life has been good. You've got a nice house, a fancy car -- but no savings.

In short, you have a big hat, but no cattle. The millionaire is next door, and he isn't knocking.

This is your moment of truth. You may not become a millionaire, but you can live like someone who is on the way to being one.

Here's how: Cut expenses, save what you can, and work longer.

"If a client is in their mid-50s and hugely behind, we start to focus on lowering expenses by paying off debt, restructuring debt, or lowering housing costs," said Guyton, the Minneapolis financial adviser.

"If that change lowers their expenses by $1,000 a month, that's more beneficial than helping them accumulate an extra $100,000," Guyton said. Indeed, cutting $12,000 a year from expenses equates to what roughly $175,000 in assets would produce at a 7% yield.

And take care of your health, Guyton added. You're going to need it in order to show up at work.